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If the Maximum Debt/equity Ratio as Specified by a Debt

Question 113

Multiple Choice

If the maximum debt/equity ratio as specified by a debt covenant is close to being violated, which of the following actions would help avoid a violation of the covenant?


A) Purchase long-term investments
B) Increase current cash dividends declared
C) Exchange bonds payable for common stock
D) Acquire money by selling land at its balance sheet value

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